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A complete guide to applying for a home loan

  • Highlights

  • Need to pay 20% of the cost of the house as down payment

  • The disbursement process and how it works

  • Legalities for home loan sanctioning & disbursement

  • Importance of keeping your credentials in order

A home loan involves 3 steps: application and approval, sanction, and disbursement.

Once you apply for a home loan, your application is reviewed and approved. Then the property and document verification is conducted. If everything goes well, the loan is sanctioned. Finally, the loan amount is disbursed as per the terms of the loan.

How much can be sanctioned?

The home loan sanction limit will be set based on many factors, such as your age, income, professional qualifications, job stability, and repayment capability. Any outstanding payments, your credit score, and your repayment history will also affect the sanctioned loan amount. Keep in mind that the home loan sanction amount may sometimes be lower than what you have requested. Once the sanction process is done, you will receive a confirmation letter.

This Home loan sanction letter validity lasts for around six months. This letter does not mean that you receive the funds right away but it serves as proof that you are eligible for a home loan.

However, the loan might get delayed if there is an issue with the loan application. Here’s everything that’s needed for a faster and a hassle-free loan sanctioning process:


The first thing any lender would check is proper documentation. Provide proofs of your identity and address, bank statements, copies of your PAN card, and your house purchase agreement.

Credential check

Lending agencies will also run a background check to verify whether you have provided accurate personal information. So, make sure all your credentials are correct before you apply for the loan.

Advantages of Refinancing your Home Loan

One-on-one interview

A personal meeting provides a better understanding of the purpose of the loan. You might be asked about your income, monthly expenses, age, and job stability, before sanctioning a loan. Once the loan is sanctioned, next is the disbursement process.

Here’s how the disbursement process works:

The paperwork

You will receive your home loan documents that you need to duly sign and submit. You will be also asked for your property documents at this stage.

The down payment

Before you get the loan amount, you will have to pay about 20% of the overall cost of the house as down payment. This may vary from lender to lender as well as your individual profile.

Legal checks

The lender will also ask for a legal assessment of the property documents that you have provided, such as the NOC and title deed.


The home loan process is not as difficult as it sounds. If you are well-prepared with an error-free application form and meet the eligibility criteria, your home loan will be processed very smoothly.

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